We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks.com featured highlights Louisiana-Pacific, The Interpublic Group of Companies, Steel Dynamics, Expeditors International of Washington and Target
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 25, 2022 – Stocks in this week’s article are Louisiana-Pacific Corp. (LPX - Free Report) , The Interpublic Group of Companies, Inc. (IPG - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and Target Corp. (TGT - Free Report) .
Top 5 Stocks with High ROE as Fed Targets Another Rate Hike
The U.S. equity markets recorded wild swings in the past couple of trading sessions, with the Fed Chairman giving broad-based hints of a rate hike of 50 basis points in May as part of an aggressive monetary policy to tame the rising inflationary pressure. This eroded the early gains that were buoyed by a strong earnings performance from hitherto reported companies and sent the market on a tailspin amid concerns regarding a slowing economy.
The earnings season has commenced on a positive note, with the majority of the companies exceeding the profit forecasts so far. However, the euphoria appeared short-lived as the imminent rate hike expectations weighed on stocks, and key benchmark indices recorded a sharp decline. Meanwhile, the 10-year Treasury yield jumped to 2.92% - hitting the highest level since December 2018. But, heightened uncertainty over the pace of monetary tightening and the prolonged Russia-Ukraine war kept the market on tenterhooks.
As investors employ a wait-and-see approach in a classic example of "backing and filling" in the market, they can benefit from 'cash cow' stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE).
A high ROE ensures that the company is reinvesting cash at a high rate of return. Louisiana-Pacific Corp., The Interpublic Group of Companies, Inc., Steel Dynamics, Inc., Expeditors International of Washington, Inc. and Target Corp. are some of the stocks with high ROE to profit.
ROE: A Key Metric
ROE = Net Income/Shareholders' Equity
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify companies that diligently deploy cash for higher returns.
Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management's efficiency in rewarding shareholders with attractive risk-adjusted returns.
Here are five of the 23 stocks that qualified the screen:
Louisiana-Pacific Corp.: Headquartered in Nashville, TN, Louisiana-Pacific is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products and exterior siding for use in residential, industrial and light commercial construction. The company's products are used primarily in new home construction, repair as well as remodeling and outdoor structures.
The Interpublic Group of Companies, Inc.: New York-based Interpublic, together with its subsidiaries, provides advertising and marketing services worldwide. It provides multi-channel advertising and communications and marketing services such as meeting and event production, public relations, sports and entertainment marketing, corporate and brand identity and strategic marketing consulting to a broad list of customers in more than 110 countries.
The company has a long-term earnings growth expectation of 4.1% and delivered a trailing four-quarter earnings surprise of 67%, on average. Interpublic carries a Zacks Rank #2.
Steel Dynamics, Inc.: Based in Fort Wayne, IN, Steel Dynamics is among the leading steel producers and metal recyclers in the United States. It currently has a steelmaking and coating capacity of more than 11 million tons. The company delivered a trailing four-quarter earnings surprise of 2.5%, on average.
Steel Dynamics sports a Zacks Rank #1. Its customer-focused approach, market diversification and low-cost operating platforms position it well for future growth opportunities.
Expeditors International of Washington, Inc.: Based in Seattle, WA, Expeditors is a leading third-party logistics provider. The company is engaged in the business of global logistics management, including international freight forwarding and consolidation, for both air and ocean freight.
This Zacks #1 Ranked company delivered a trailing four-quarter earnings surprise of 34.2%, on average. Expeditors is gaining from the uptick in airfreight revenues and is well poised for the post-pandemic market revival.
Target Corp.: Founded in 1902, Target provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids. It also houses food and pet supplies, home furnishings and décor, home improvement, automotive products and seasonal merchandise.
Target has evolved from just being a pure brick-&-mortar retailer to an omni-channel entity. The company has a long-term earnings growth expectation of 16.5% and delivered a trailing four-quarter earnings surprise of 21.3%, on average. Target sports a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Zacks.com featured highlights Louisiana-Pacific, The Interpublic Group of Companies, Steel Dynamics, Expeditors International of Washington and Target
For Immediate Release
Chicago, IL – April 25, 2022 – Stocks in this week’s article are Louisiana-Pacific Corp. (LPX - Free Report) , The Interpublic Group of Companies, Inc. (IPG - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) , Expeditors International of Washington, Inc. (EXPD - Free Report) and Target Corp. (TGT - Free Report) .
Top 5 Stocks with High ROE as Fed Targets Another Rate Hike
The U.S. equity markets recorded wild swings in the past couple of trading sessions, with the Fed Chairman giving broad-based hints of a rate hike of 50 basis points in May as part of an aggressive monetary policy to tame the rising inflationary pressure. This eroded the early gains that were buoyed by a strong earnings performance from hitherto reported companies and sent the market on a tailspin amid concerns regarding a slowing economy.
The earnings season has commenced on a positive note, with the majority of the companies exceeding the profit forecasts so far. However, the euphoria appeared short-lived as the imminent rate hike expectations weighed on stocks, and key benchmark indices recorded a sharp decline. Meanwhile, the 10-year Treasury yield jumped to 2.92% - hitting the highest level since December 2018. But, heightened uncertainty over the pace of monetary tightening and the prolonged Russia-Ukraine war kept the market on tenterhooks.
As investors employ a wait-and-see approach in a classic example of "backing and filling" in the market, they can benefit from 'cash cow' stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios like return on equity (ROE).
A high ROE ensures that the company is reinvesting cash at a high rate of return. Louisiana-Pacific Corp., The Interpublic Group of Companies, Inc., Steel Dynamics, Inc., Expeditors International of Washington, Inc. and Target Corp. are some of the stocks with high ROE to profit.
ROE: A Key Metric
ROE = Net Income/Shareholders' Equity
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify companies that diligently deploy cash for higher returns.
Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management's efficiency in rewarding shareholders with attractive risk-adjusted returns.
Here are five of the 23 stocks that qualified the screen:
Louisiana-Pacific Corp.: Headquartered in Nashville, TN, Louisiana-Pacific is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products and exterior siding for use in residential, industrial and light commercial construction. The company's products are used primarily in new home construction, repair as well as remodeling and outdoor structures.
Louisiana-Pacific delivered a trailing four-quarter earnings surprise of 13.3%, on average. It sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here.
The Interpublic Group of Companies, Inc.: New York-based Interpublic, together with its subsidiaries, provides advertising and marketing services worldwide. It provides multi-channel advertising and communications and marketing services such as meeting and event production, public relations, sports and entertainment marketing, corporate and brand identity and strategic marketing consulting to a broad list of customers in more than 110 countries.
The company has a long-term earnings growth expectation of 4.1% and delivered a trailing four-quarter earnings surprise of 67%, on average. Interpublic carries a Zacks Rank #2.
Steel Dynamics, Inc.: Based in Fort Wayne, IN, Steel Dynamics is among the leading steel producers and metal recyclers in the United States. It currently has a steelmaking and coating capacity of more than 11 million tons. The company delivered a trailing four-quarter earnings surprise of 2.5%, on average.
Steel Dynamics sports a Zacks Rank #1. Its customer-focused approach, market diversification and low-cost operating platforms position it well for future growth opportunities.
Expeditors International of Washington, Inc.: Based in Seattle, WA, Expeditors is a leading third-party logistics provider. The company is engaged in the business of global logistics management, including international freight forwarding and consolidation, for both air and ocean freight.
This Zacks #1 Ranked company delivered a trailing four-quarter earnings surprise of 34.2%, on average. Expeditors is gaining from the uptick in airfreight revenues and is well poised for the post-pandemic market revival.
Target Corp.: Founded in 1902, Target provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids. It also houses food and pet supplies, home furnishings and décor, home improvement, automotive products and seasonal merchandise.
Target has evolved from just being a pure brick-&-mortar retailer to an omni-channel entity. The company has a long-term earnings growth expectation of 16.5% and delivered a trailing four-quarter earnings surprise of 21.3%, on average. Target sports a Zacks Rank #1.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1905209/top-5-stocks-with-high-roe-as-fed-targets-another-rate-hike
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.